The Philippines is finally going after plastic producers, but some companies are not cooperating – Part 1 of 2

By Elyssa Lopez

Philippine Center for Investigative Journalism

Environmental groups in the Philippines have long advocated for a single-use plastics ban, and hundreds of proposed laws and resolutions were filed in Congress in the past decade to support the call. Nothing prospered.

Instead, Congress required the country’s biggest plastic-producing companies to pay to collect and recycle their materials.

The Extended Producer Responsibility (EPR) Act of 2022 mandates companies with more than P100 million assets to develop a scheme to recover the same amount of plastics they produce or face a fine of at least P5 million.

It’s been a year since the law took effect, but the implementation remains short. The Philippine Center for Investigative Journalism (PCIJ) learned the companies continue to exhibit a “wait-and-see” attitude on how the administration of President Ferdinand Marcos Jr. will implement the measure, casting doubt on the country’s ability to tackle its growing plastic waste problem.

Unclear guidelines are leading companies to have a cautionary approach to the law, according to the Philippine Business for Social Progress (PBSP), tapped by 29 corporations to capture their plastic packaging wastes from the environment under the EPR law.

“The main challenge right now is that the guidelines for implementation are still in flux,” Elvin Yu, PBSP executive director, told the PCIJ.

“It’s still unclear what the guidelines are for the compliance audit of obliged enterprises, for example, and we are seven months into the year. That’s going to be a problem,” he added.

The National Ecology Center under the Environmental Management Bureau (EMB) has yet to issue a compliance auditing manual for these enterprises, he said.  The Department of Finance, specifically the Bureau of Internal Revenue, is also silent on the tax incentives for the enterprises.

“So many companies are in a wait-and-see attitude. They want to know how the DENR (Department of Environment and Natural Resources) would really implement the law,” Yu added.

Crispin Lao, executive director of PARMS (Philippine Alliance for Recycling and Materials Sustainability), observed that some companies remained confused about the kind of EPR programs to adopt and the kind of benefits to avail of.

“There are some companies, which may not have sustainability as a priority, that are still in denial that they are mandated to do this [EPR],” Lao added.

“Kita naman na nangangapa pa sila (It’s clear they’re groping in the dark),” Lao said, when asked on how the EMB has handled the EPR implementation so far. “It would have been better if there were more discussions, more talks with the private sector so they could be prepared.”

If the government was clear on the tax incentives, “it could have been one way to encourage registration and compliance of obliged enterprises,” said Ferth Vandensteen Manaysay, deputy manager at the Climate Reality Project Philippines.

PCIJ reached out to the DENR and the EMB, but has yet to receive a response.

Low registration among companies

In a forum with business leaders two months ago, Environment Secretary Antonia Yulo-Loyzaga pleaded with the enterprises to register their EPR plastic recovery program with the government given the relatively low number of registrants.

“We need your help [so more would be] registering in the EPR. This is extremely important for us to bring down the amount of solid waste that is released into our environment,” she said then.

As of July, only 662 of around 4,000 enterprises registered with the Department of Trade and Industry had submitted to the National Solid Waste Management Commission their programs for the proper management of their plastic wastes.

Under the EPR law, a company must recover 20% of its plastic wastes by year-end of 2023, a target that increases by 20% a year until it reaches 80% by the end of 2028.

The company is required to register its EPR program with the DENR for proper audit. It may undertake its own EPR program or tap another party called the producer responsibility organization (PRO), such as PBSP and PARMS, to do this.

Enterprises face minimum fines of P5 million on first offense and P10 million on second offense, and suspension of business permit on third offense.

The industry’s slow compliance has prompted the DENR to implement the EPR law in mostly urban areas, such as Metro Manila in Luzon, Cebu in Visayas, and Davao in Mindanao this year. These areas, after all, would have the most available facilities for waste processing.

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Gaps in the law

For environmental groups, the industry’s lukewarm reception reveals gaps in the new law.

“We initially wanted higher fines, for example, because P5 million could easily be the annual salary of the top executives [of these companies],” said Coleen Salamat of the EcoWaste Coalition.

A longer consultation with stakeholders could have led to a stronger, more effective policy, she said.

The law is problematic because companies may still continue producing plastic waste and not have clear commitments on plastic reduction, said Miko Aliño of Break Free From Plastic.

“Under this law, as long as you are collecting waste, whatever you do, whether you burn it in cement kilns, or recycle, you are compliant… The law allows them (corporations) to operate business as usual,” Aliño said.

“It’s what my colleague Von [Hernandez] would say as a ‘polluter-friendly’ policy’.”

Salamat said she and her colleagues were “shocked” by the speed of the deliberations. It was “quick’’ in comparison with other environmental laws, he said. (See timeline here: https://pcij.org/data/423/epr-in-the-philippines-law-pushed-by-plastic-producers-took-15-months-to-hurdle-congress

“Meanwhile the Single Use Plastics Ban bill had not made progress, when it was vocally supported by former President [Rodrigo] Duterte,” Salamat said right after Congress passed the EPR law.

PARMS, which counts some of the biggest fast moving consumer goods (FMCGs) companies as members, was one of the industry groups that lobbied for the passage of the EPR law. Its members include Coca-Cola Philippines, Monde Nissin, Universal Robina, P&G and Unilever.

“Before, the conversation was geared towards the banning of single-use plastic applications, but Congress could not provide an alternative [to the material],” Lao said. “So yes, the industry is supportive of the EPR.”

The measure was first introduced in the Senate in February 2020, right before the pandemic, by Sen. Cynthia Villar. According to a Reuters report, Unilever had directly lobbied Senator Villar to push for its passage.

A year later, the senator’s daughter, Las Piñas Rep. Camille Villar, also introduced the EPR bill in the House of Representatives. Congress deliberated the measure as the Covid-19 pandemic raged and saw its passage within 15 months, from the first time a Senate joint committee first conducted a hearing on the measure.

Duterte was supportive of the ban on single-use plastics, according to his spokesperson Salvador Panelo. While presidents have the power to veto bills, Duterte sat on the measure. He left his post without approving or rejecting the proposed EPR law.

Marcos Jr. succeeded Duterte. In his inaugural speech, he vowed to “clean up” the country’s plastic waste problem. “We are the third biggest plastic polluter in the world, but we won’t shirk from that responsibility. We will clean up,” he said.

Marcos could have vetoed the EPR law, too, but he didn’t exercise this power. He also sat on the measure until it lapsed into law in July 2022, during his first month in Malacañang,

A year into his presidency, during his second State of the Nation Address on July 24 this year, Marcos asked Congress to pass a law imposing excise taxes on single-use plastics.

Environmentalists are afraid it may still not be enough. (PCIJ)